The city of Los Angeles will receive more than $500,000 for environmental and community programs and pay "competitive" trash disposal rates under an agreement finalized Friday to reopen the controversial Sunshine Canyon Landfill above Granada Hills.

The agreement also calls on the owner of the dump, Browning-Ferris Industries Inc., to drop a $400-million lawsuit against the city, according to sources and city reports.

The City Council tentatively accepted the deal in a closed door session Wednesday and Browning-Ferris approved it Friday. However, both sides have yet to release all the details of the agreement pending the formal court action to drop the suit.

A one-page summary of the settlement released Friday provides only a general outline of the agreement.

What is clear, however, is that reopening Sunshine Canyon will provide city officials a trash disposal option that could replace the equally controversial Lopez Canyon Landfill in Lake View Terrace, which is scheduled to close in February.

Sunshine Canyon straddles the city and county border north of Granada Hills. After the city closed the landfill on the city side in 1991, Browning-Ferris began to expand the dump on the county side.

But in March, the city's Board of Zoning Appeals voted to prohibit Browning-Ferris from routing trash trucks through an access road within the city's borders. The board cited zoning restrictions and criticized the firm's record of operating the dump.

Browning-Ferris, the second largest trash disposal firm in the nation, responded by filing a lawsuit seeking $400 million in lost revenue.

Under the settlement agreement, the City Council overturns the Board of Zoning Appeals decision and allows Browning-Ferris to use the access road for trash hauling.

In exchange, Browning-Ferris dismisses the lawsuit, provides funds for environmental and community programs and "offers to accept city residential and municipal solid waste at the Sunshine Canyon Landfill at a competitive price," according to the one-page settlement summary.

City Hall sources said Browning-Ferris has agreed to initially pay $550,000 for environmental programs and to add $55,000 to the fund each year for the first five years. That amount increases to $82,500 each year after the fifth year. The total could reach $1.2 million in 10 years, sources said.

City officials said the trash disposal rate offered by Browning-Ferris is $18.20 per ton--a price that is comparable to fees recently offered at the privately run Bradley Landfill in Sun Valley but slightly higher than the cost of dumping in city-owned Lopez Canyon.

Lopez Canyon takes about 80% of the city's trash. Its operating permit expires in February, but sanitation officials have recommended extending the life of the dump, citing studies that show that Lopez Canyon provides the lowest trash disposal costs.

Councilman Richard Alarcon, who has fought for years to close Lopez Canyon, said the settlement provides another option for city officials who are seeking alternatives to Lopez Canyon.

But despite his hard fought efforts to close Lopez Canyon, Alarcon said that he voted against the settlement and is opposed to reopening Sunshine Canyon in exchange for closing the Lopez Canyon Landfill.

Still, he said Lopez Canyon was mentioned during settlement discussions.

Alarcon said some council members suggested that the disposal rate offered by Browning-Ferris can be used as a bargaining chip to get lower rates from other private firms that have offered to take the city's trash once Lopez Canyon is closed.

However, Sunshine Canyon may not be a viable alternative to Lopez Canyon because construction at the Sunshine landfill will not be completed for up to six months, according to Browning-Ferris representatives.

The project could be held up even longer if neighbors of the Sunshine Canyon landfill follow through on a threat to file their own lawsuit to hold up the project.

Rosemary Woodlock, an attorney representing the North Valley Coalition of Concerned Citizens, a group of landfill opponents, said she feels her group already has a basis for a lawsuit to halt the landfill.

"It's under question whether the City Council can bypass its entire zoning ordinance" by overturning the decision of the Board of Zoning Appeals, she said.

Woodlock said her group also feels that Browning-Ferris has yet to prove that the landfill meets the state seismic safety standards adopted for landfills after the Northridge quake.

But Arnie Berghoff, a spokesman for Browning-Ferris, said he believes the landfill meets current safety standards. If it does not, he said his firm is willing to make the necessary improvements.

Berghoff also brushed off the threat of a lawsuit from the homeowners, saying the settlement is legally sound.

"We are confident and the city attorney is confident that the action is very, very legal," he said. "If there are legal challenges, let the court decide."